Early on while trading, I am learning the importance of using multiple indicators to make trading decisions. One of my biggest frustrations when I first started in crypto was, “how do I know WHEN to buy and how do I know WHEN to sell” I mean, obviously buy high and sell low… right? Sounds simple… right? But when are those highs and when are those lows, thats the question. I missed good profits early on from my lack of knowledge. While I won’t boast myself as a professional, I am a very active trader thats constantly learning. - always open to feedback.
Exit indicator #1 Fib Retracement.
We are approaching our .786 ($4561) fib line of this retracement. The Fib retracement tool is one of the strongest to help determine potential entry/exit points in my opinion. The .786 is a common place to to take profits. Keep in mind, depending on momentum, price action may not actually HIT this line. It may jump over, and it may fall just short. With the psychological resistance of $4500 and with current lack of momentum, we could look to see a sell off any where between the time of writing ($4425) and the .786 line.
Exit indicator #2 Trend lines (ascending triangle)
Converging trend lines almost always seem to squeeze price action. The closer we get to the tip of a wedge/triangle/pennant, the closer we get to more drastic price action. In this case the the top trend line, or resistance trend, is formed from an old support trend line that helped move us passed the 3k mark back in august. The bottom trend, or support trend, has been established from our current 3k rebound. Also, because this forms an ascending triangle, I do see this as a bearish sign. Think about buyers and sellers as kinetic energy being built up. Right now the lack of seller involvement is allowing the sellers to coil tighter and tighter and tighter until we hit that sell point and then BOOM we see a sell off. Opposite in a descending triangle… we see sellers out competing the buyers until it the buyers coil tighter and tighter and BOOM we see a break out.
Exit indicator #3 RSI
I have learned that many pros see the RSI as a strong indicator to show a trend reversal. While charting coins I have also come to rely on this as a strong indicator. We can see higher highs in the price however we see lower highs on the RSI. This is usually a hint that it’s time to take profits.
Exit indicator #4 - Volume
Volume is dwindling. Now I have seen break outs with low volume however most the time I find these break outs are short lived or quickly reversed. I won’t trade off volume alone however these charts do show momentum or lack there of.
Exit Indicator #5 - Fundamental analysis
There is a big divide in the bitcoin camp right now. Charlie Lee, creator of litecoin, and 3 others have each wagered a 250 BTC trade off against Richard Ver and the new currency being created in the November hard fork. This type of sentiment is working against the bulls. The community/miner approval back in august had a totally different feel to it. Anticipation and acceptance. I’m not feeling the same sentiment. In a market that is so heavily impacted by news I think we would be silly to trade solely on technicals.
I'd love to hear feedback!
Exit indicator #1 Fib Retracement.
We are approaching our .786 ($4561) fib line of this retracement. The Fib retracement tool is one of the strongest to help determine potential entry/exit points in my opinion. The .786 is a common place to to take profits. Keep in mind, depending on momentum, price action may not actually HIT this line. It may jump over, and it may fall just short. With the psychological resistance of $4500 and with current lack of momentum, we could look to see a sell off any where between the time of writing ($4425) and the .786 line.
Exit indicator #2 Trend lines (ascending triangle)
Converging trend lines almost always seem to squeeze price action. The closer we get to the tip of a wedge/triangle/pennant, the closer we get to more drastic price action. In this case the the top trend line, or resistance trend, is formed from an old support trend line that helped move us passed the 3k mark back in august. The bottom trend, or support trend, has been established from our current 3k rebound. Also, because this forms an ascending triangle, I do see this as a bearish sign. Think about buyers and sellers as kinetic energy being built up. Right now the lack of seller involvement is allowing the sellers to coil tighter and tighter and tighter until we hit that sell point and then BOOM we see a sell off. Opposite in a descending triangle… we see sellers out competing the buyers until it the buyers coil tighter and tighter and BOOM we see a break out.
Exit indicator #3 RSI
I have learned that many pros see the RSI as a strong indicator to show a trend reversal. While charting coins I have also come to rely on this as a strong indicator. We can see higher highs in the price however we see lower highs on the RSI. This is usually a hint that it’s time to take profits.
Exit indicator #4 - Volume
Volume is dwindling. Now I have seen break outs with low volume however most the time I find these break outs are short lived or quickly reversed. I won’t trade off volume alone however these charts do show momentum or lack there of.
Exit Indicator #5 - Fundamental analysis
There is a big divide in the bitcoin camp right now. Charlie Lee, creator of litecoin, and 3 others have each wagered a 250 BTC trade off against Richard Ver and the new currency being created in the November hard fork. This type of sentiment is working against the bulls. The community/miner approval back in august had a totally different feel to it. Anticipation and acceptance. I’m not feeling the same sentiment. In a market that is so heavily impacted by news I think we would be silly to trade solely on technicals.
I'd love to hear feedback!